Does corruption hinder private businesses? Leadership stability and predictable corruption in China
Document Type
Journal article
Source Publication
Governance: An International Journal of Policy, Administration, and Institutions
Publication Date
6-2017
Volume
30
Issue
3
First Page
343
Last Page
363
Publisher
Wiley-Blackwell Publishing, Inc.
Abstract
We study whether corruption hinders businesses by investigating China's private enterprises, which have developed rapidly despite high corruption levels. We argue that a key factor determining the effects of corruption is corruption predictability, which is significantly influenced by government leadership stability. When the same leaders remain in major offices for long tenures, corruption is relatively predictable, reducing hindrance to businesses. When leaders change frequently, entrepreneurs need to constantly cultivate new connections with officials and face more uncertainty; therefore, corruption becomes a major obstacle. We conduct field interviews to explore channels through which leadership stability encourages predictable corruption. We also use the 2012 World Bank Enterprise Survey of Chinese private firms and develop a novel measure of leadership stability of the local Chinese government based on a self-collected data set of municipal party committees to test our hypotheses. Results of various models are consistent with our hypotheses.
DOI
10.1111/gove.12220
Print ISSN
09521895
E-ISSN
14680491
Funding Information
This project is sponsored by Hong Kong RGC GRF (project no. 17411814). {17411814}
Publisher Statement
Copyright © 2016 Wiley Periodicals, Inc.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Zhu, J., & Zhang, D. (2017). Does corruption hinder private businesses? Leadership stability and predictable corruption in China. Governance: An International Journal of Policy, Administration, and Institutions, 30(3), 343–363. doi: 10.1111/gove.12220